Still not clear Universal Credit IT will work warn MPs

09 April 2014

There remains worrying uncertainty about the new Universal Credit (UC) IT system, says the Work and Pensions Committee in a report published today. This includes how it will work, how much it will cost, and who will develop it.

National roll-out of UC was due to begin in October 2013. But problems with IT systems meant that major changes to the implementation timetable were made in July and then again in December 2013. Currently, UC claims are still limited to 10 Pathfinder Jobcentres. New claims are not expected to be extended to the whole of Great Britain until 2016; and the bulk of existing claimants will not move over to UC until 2016-17.

Commenting, Dame Anne Begg MP, Committee Chair, said:

"Only 4,280 people were claiming Universal Credit by December 2013 and the majority of these claims were of the simplest nature. By comparison, in the same month, 1.22 million people were claiming Jobseekers Allowance. This demonstrates the scale of the challenge still facing the Government in trying to implement UC by 2017.

"Whilst it is right to ensure that the system works properly before extending it, there is a difference between cautious progress and a snail’s pace. Given the excruciatingly slow pace of roll-out to date, it is hard to see how the most recent implementation timetable can be met."

The Department for Work and Pensions (DWP) is trying to resolve the IT problems by developing a new “end-state solution” for UC IT which will eventually replace the IT system currently in use in the UC Pathfinders. This is costing £25-32 million to develop up to November 2014, with no indication of how much more it will cost in the long-term. And it will only be clear that it works once it has been tested at scale. However, it is still some way from being tested on the first 100 claimants.

The Government should provide more detail on what the end-state solution means in practical terms, including how much it will cost, when it will be ready to test on the first claimants, how it will be extended, and when it is expected to be fully implemented.

The current "twin track" approach to UC IT development also means that the Government is still spending money on the existing IT being used in the Pathfinder while the end-state solution is developed.

The Committee Chair said:

"The money wasted on Universal Credit so far – £40 million on IT software that now has no use and £90 million on software with a useful life of only 5 years – is a matter of deep regret. It is vital that DWP learns the lessons of past mistakes.

"At the same time as developing the "end-state solution" the Government intends to spend £37-£58 million on further developing the existing IT system. Given the small number of people currently claiming UC, the Government should consider whether it would be a better use of taxpayers’ money to abandon further development of the existing system and focus solely on the end-state solution.

"Despite the millions being spent on the end-state IT solution it is still not clear when the system will be ready or even how it will work. It is still not ready for testing on the first 100 claimants, and we have no indication of when it will be possible to test it on a bigger and more representative group of claimants."

The Report’s other conclusions and recommendations include:

Scrutiny of Universal Credit

The Government has hampered the Committee’s scrutiny of UC implementation by not providing accurate, timely and detailed information. It is not acceptable for the Government only to provide information about major policy changes when forced to do so by the imminent prospect of being held to account in a public evidence session. DWP should set out how it will improve the frankness, accuracy and timeliness of the information it provides to the Committee on UC implementation.

"Effective select committee scrutiny depends on the provision of accurate, timely and detailed information by government departments. DWP has not always provided this to the Committee in the case of Universal Credit.

The serious problems with UC came as news to us when the National Audit Office published its highly critical report last September, because the Government had not told us about its own concerns about UC, and the actions it had taken to address them, during 2012 and early 2013.

On two occasions, the Government has made public the details about major changes to the timetable for UC implementation only when forced to do so by the prospect of oral evidence in front of the Committee. This lack of openness and transparency is not acceptable.

We do not, as the Secretary of State suggested, want to run his Department. We do, however, expect to have access to the information we need to scrutinise it effectively."

Supporting vulnerable people to adjust to UC

The Government has set out in the Local Support Services Framework (LSSF) how it envisages support for vulnerable people being provided in partnership with local authorities, housing providers and the voluntary sector. However, there is a lack of detail on how the LSSF will operate in practice. DWP should ensure that detailed information about the operation and funding of the LSSF is set out when the final version is published in autumn 2014.

"The fundamental problems with Universal Credit have understandably dominated recent public debate. But how vulnerable people will be supported through the transition remains a key concern.

The Minister stated that how support would be provided for vulnerable people was almost as important as Universal Credit itself. But like Universal Credit IT, it is still far from clear how this will work in practice or what funding will be provided for it."

Local Authority funding

Delays to UC implementation mean that local authorities will now administer housing benefit for much longer than anticipated. DWP needs to provide local authorities with clarity on the funding that will be available in 2014-15 and 2015-16 to cover this additional cost.

"Local authorities, which were expecting new claims for housing benefit to have ended by April 2014, will now be administering it as a separate benefit until at least 2016. It is impossible for them to know how to handle their housing benefit departments until the Government clarifies what funding will be available."